SEACOAST BANKING CORP OF FLORIDA Q4 FY2024 earnings call

• Seacoast delivered an outstanding quarter with adjusted pre-tax pre-provision earnings of $56.6 million, a 22% increase from the prior quarter. - Net interest margin expanded by 22 basis points to 3.39%. - Strong granular core deposit franchise reduced cost of deposits by 26 basis points. - Loan production was strong with originations of $900 million in Q4. - Wealth management and treasury management fees overcame lost revenue from service charges and interchange due to hurricanes. - Investments in talent across the footprint drove onboarding and new relationships. - Asset quality metrics improved with significant decline in classified and criticized assets.

In the fourth quarter, Seacoast reported net income of $34.1 million or $0.40 per share. Net interest income was $115.8 million, up 9% from the prior quarter. The net interest margin expanded 22 basis points to 3.39%. Non-interest income, excluding securities activity, increased 8% from the prior quarter. Loan outstandings increased at an annualized rate of 3.7%, with record production of over $900 million in the fourth quarter. The cost of deposits declined 26 basis points to 2.08%. The adjusted return on tangible assets improved to 1.24%. The Wealth division saw total AUM increase 20% year-over-year to $2.1 billion.

• Expect continued expansion of net interest income in Q1 with core net interest margin expected to expand another approximately 7-10 basis points. - For full year 2025, assuming no change in yield curve and one Fed rate cut, core net interest margin expected around 3.35%; an additional rate cut could add ~5 basis points. - Non-interest income expected in Q1 to be in range of $20-22 million. - Anticipate low-to-mid single-digit loan growth early in the year moving to high single-digit growth by end of year.

• Competition in the market, especially from super-regional national banks moving back into commercial real-estate. - Macroeconomic factors such as the 10-year treasury yield as a wildcard for demand. - Potential impact of Fed rate cuts or lack thereof on deposit costs and loan yields.

Q: Woody Lay asked about loan growth in the year ahead, pipeline seasonality, yield on new production, and M&A opportunities.

A: Chuck Shaffer said loan growth expected to be low-to-mid single-digits early year moving to high single-digits late year, pipeline seasonality normal, yield on new production influenced by rate environment and competition, and active in M&A market opportunistically.

Q: Russell Gunther inquired about loan sales in the quarter, pace of loan growth and payoffs, deployment of excess capital, and expense run-rate.

A: Tracey Dexter clarified $20 million in consumer fintech and non-performing commercial real-estate loan sales, Michael Young noted better net loan growth outlook in 2025 with fewer payoff headwinds, and Tracey mentioned expense discipline with seasonality and investment in growth.

Q: David Feaster asked about growth drivers, hiring, and profitability profile.

A: Chuck Shaffer said growth driven by talent investments, demand reasonably strong, continued hiring opportunities balanced with profitability, and Michael Young discussed positive operating leverage with margin and NII dynamics.

Q: Christopher Marinac asked about margin and criticized assets.

A: Tracey Dexter talked about margin stability and Chuck Shaffer stated criticized and classified assets are stable and strong compared to industry.

Q: David Bishop asked about deposit pipeline funding loan growth and accretion income.

A: Michael Young discussed funding with low loan-to-deposit ratio and securities cash flow, and Tracey mentioned accretion income variability and lower end of historical range for future estimates